Korean Crypto Industry Opposes New AML Rules: Cross-Border Transfer Reporting Threshold May Trigger Compliance Pressure

Odaily Planet Daily News: South Korea's crypto industry has expressed strong concerns over proposed amendments to anti-money laundering (AML) regulations, arguing that the rules could impose excessive compliance burdens on Virtual Asset Service Providers (VASPs).

According to Yonhap News Agency, the Digital Asset eXchange Alliance (DAXA), representing 27 VASPs including Upbit, Bithumb, Coinone, Korbit, and Gopax, submitted comments opposing the classification of all overseas virtual asset transfers exceeding 10 million won (approximately $6,800) as suspicious transaction reports.

DAXA warned that this rule could cause the number of suspicious transaction reports from South Korea's top five exchanges to skyrocket from approximately 63,000 last year to over 5.4 million—an increase of about 85 times—severely impacting the efficiency of actual compliance execution. Furthermore, the industry also opposes a new obligation requiring exchanges to verify the accuracy of customer information, arguing it exceeds the scope of current legal authorization.

South Korea's Financial Services Commission (FSC) and Financial Intelligence Unit (FIU) proposed the relevant amendments on March 30, which have now entered a public comment period, with final deliberation expected to be completed in July.

Meanwhile, legal disputes between Korean exchanges and regulators over AML penalties continue. Multiple platforms are challenging previous business restrictions and fines through the courts, reflecting an escalating tension between regulatory tightening and the industry's execution capabilities. (Cointelegraph)